Human Resources: Lack of access to a qualified workforce continues to drive relocation numbers

EVANSVILLE, Ind. — One-third of companies that relocate employees internationally said they transferred more employees to foreign countries last year than the previous year, according to Atlas World Group’s 2007 Corporate Relocation Survey released today. Of the employees who were transferred internationally, nearly 30 percent were headed for Asia or the Pacific Rim. In the last 10 years the number of companies listing the booming Asia Pacific region as their most frequent international destination has risen nearly 15 percent.

Additionally, nearly 30 percent of companies surveyed predict that their international employee transfers will increase in 2007. Overall, the number of companies reporting increases in relocation volume — international or domestic — was down slightly, from 44 percent to 39 percent.

These statistics offer a view of the changing landscape of corporate relocation, which Atlas World Group uncovers each year in a comprehensive survey. The Evansville-based corporate relocation, transportation and global logistics firm is celebrating the 40th anniversary of the survey, which lends insight into relocation trends and serves as a barometer for the industry.

Industry and economic trends

Over four decades, the survey has revealed trends in employment benefits, globalization, the workforce and the U.S. economy. Here’s a closer look at a few of those trends:

The pool of employees likely to be relocated is becoming older and more diverse.
Outsourcing, which continues to be an important factor in the international market, has undergone considerable changes — increasing, leveling off, declining and increasing again this year.
Company growth has had an increasing influence in relocations over the past three years, while the influence from corporate reorganization has dropped significantly.
The percentage of companies citing budget constraints is more than three times lower than it was five years ago, and the number of companies citing economic conditions as a major factor for relocations decreased from more than half in 2003 to a quarter in 2007.

Getting employees to the job

The lack of access to a local, qualified workforce has become the most important external factor affecting a company’s relocation decisions in the past two years. In fact, back in 1987, only 16 percent of companies said access to workforce was an issue. By 2007, that number jumped to 52 percent. In an effort to fill the void, more and more companies are transferring seasoned veterans. Nearly a third of companies reported the age range of their most frequently transferred employees is 40 years old and above — up from 11 percent in 1973. Other trends include:

Families are weighing in more heavily on relocation offers. Thirty-four percent of companies reported that declining a relocation opportunity could hinder an employee’s career. Of those who say no to a move, eight out of 10 declined the transfer due to family issues and ties — compared to one in 10 in 1982.
Relocation reimbursement packages have undergone major changes. In the past 30 years, full reimbursement packages have steeply declined. In 1977, 86 percent of companies fully reimbursed transferees. That figure dropped to 82 percent in 1987, then to 72 percent 10 years later. Today, only 55 percent of companies offer full reimbursement to transferees.

“Reimbursement policy and cost are among the most significant changes the survey has shown us over the past 40 years,” said Greg Hoover, senior vice president and chief marketing officer for Atlas World Group. “Another drastic change has been the use of the Internet. It’s created a more efficient moving experience that allows customers to operate in real time by tracking shipments and conversing with employees and Atlas agents through e-mail. It’s clear that the technology employed by van lines to boost customer service will continue to be an important and differentiating factor in this industry.”

2007 Survey fast facts:

36 percent of firms surveyed had sales of more than $1 billion.
75 percent reported better financial performance than the previous year.
69 percent of small companies relocated nine or fewer employees.
28 percent of all companies relocated 100 or more employees.
29 percent of companies indicated that the most frequent destination of transferees was the Midwest, followed by the South at 22 percent, the Northeast at 22 percent and the West at 14 percent.
41 percent of employees have up to two weeks to accept a transfer.
13 percent of companies forbid hiring spouses; 70 percent allow hiring a spouse in a different department or division.
42 percent of companies relocated employees internationally.
Service is still the most important factor to companies evaluating or selecting a carrier for corporate relocations — more than 80 percent of respondents rated it as critically important. Reputation and price, at 58 percent and 56 percent, ranked second and third overall in the selection of a carrier.

Comparison fast facts:

Internet usage as a tool during the relocation process has jumped from 16 percent to 78 percent in the last 10 years.
30 years ago more than 80 percent of firms paid for unlimited weight to be moved, compared to 42 percent in 2007.
Internationally, companies that offer permanent storage allowances have decreased from 64 percent in 1995 to 37 percent in 2007.
In 1987 more than half of employees were involved in choosing their household goods transportation provider. In 1997 that figure decreased 5 percent, and in 2007 only 38 percent of companies reported employee participation.
Nearly 80 percent of companies responded that less than 1 percent of their transferees were women in 1977. Today, nearly 20 percent of transferred employees at all companies are women.
The 2007 survey showed 33 percent of companies offered spousal employment assistance, compared with less than 10 percent in 1977.
In the 2007 survey, 56 percent of survey respondents were female, compared with 61 percent in 1997 and 40 percent in 1987.
In direct correlation with the decline of full reimbursement packages being offered to new hires, the number of companies offering partial reimbursement has increased from 12 percent in 1977 to 43 percent in 2007. In this year’s survey, almost a third of companies offered lump-sum payments to transferees and new hires.

Nearly 400 corporate relocation professionals completed this year’s survey online between Jan. 9 and Feb. 28, 2007. Most respondents work in human resources or personnel departments for service, manufacturing, financial and government organizations, and half work for international companies. Nearly half of the respondents represent firms with fewer than 500 salaried employees, and 56 percent represent midsize and large firms.

For complete survey results visit www.atlasworldgroup.com/survey.

Atlas Van Lines is the largest subsidiary of Atlas World Group, an Evansville, Ind.-based company that posted record revenues of $986 million in 2006. Atlas World Group companies employ more than 700 people throughout North America. More than 500 Atlas agents in the United States and Canada specialize in corporate employee relocation and in the transportation of high-value items such as electronics, fine art and new fixtures and furniture. Visit www.atlasworldgroup.com for more information on the company and Atlas agents.